"The future is all about the power of "we" and how to collaborate with Web 2.0," said Cisco CEO John Chambers, reprising his gospel of broadband connnectedness. He was speaking at the Technology Innovation Summit held at the University of California, Berkeley. The event was hosted by Charlie Rose and sponsored by TechNet and the Churchill Club.

Chambers is a big believer in the power of virtual collaboration, which makes sense since he has bet his business on it with products like the $300,000 Cisco TelePresence system. Instant messaging has surpassed email as the main communication tool at Cisco, he said, and video messaging will take the lead in two years. You could call that prediction an example of eating or promoting his own dog food.

Chambers said that the new generation, using social networks, wikis, YouTube and other Web 2.0 technologies will drive the next decade of increased productivity and economic growth, in large part due to people connecting virtually via the global Internet and broadband infrastructure to speed innovation. "It will completely change the concept of work," he said, stating that social networking will break down corporate hierarchies and unleash virtual teams to move into market adjacencies with speed that results in huge competitive advantage.

"Over the last four or five years, there hasn't been much innovation in technology," Chambers said. Change will come driven by consumer trends, he explained, and predicted productivity growth of three to five percent or more enabled by many-to-many communication and any kind of content accessible from any device.

However, breaking down those hierarchies won't happen overnight. Organizations managed by command and control aren't about to give the keys to the kingdom to the IM, Facebook generation.

Chambers was joined by John Chen, CEO of Sybase, and Laura Tyson, professor at the Haas School of Business and former economic advisor to President Clinton. The broader discussion centered around education, immigration, globalization and the role of government.

You have to wonder if Chambers would apply his theory of how Web 2.0 will change the workplace to how governments could change--not just the social Web but a social Politic.

Rose said that the discussion would charting a national innovation policy in light of the upcoming 2008 presidential election, but it mostly outlined issues surrounding innovation in the flat world--education, immigration, infrastructure, policy and globalization.

Tyson cited high school dropout rates (30 percent in Oakland, CA, a few miles from the event location), a deficiency in math and science education and the number of PhD's graduating as major barriers to innovation in the U.S. "We are not building people power adequately," she said. "Right now we are the innovation superpower, but there are some disturbing trends and competitors are doing things to catch up." She cited a compression in development time, in which competitors such as China and India could catch up to the U.S. in five years in areas of innovation. She also called for more government funding of basic R&D to complement what goes on in private industry to turn basic research into products.

America's innovation peril, according to Chen, is the result of competitors who are more hungry and bursting with talented people. "U.S. immigration policy makes no sense. Fifty percent of PhDs in this country are foreigners. It costs the country a lot. The first thing they graduate, we want them to leave," he said. Chambers said that 71 percent of Cisco engineers are of Asian descent.

"The government has to create an environment for success," Chambers said, "and not make determining factors on who or what technology wins. We have to compete on a fair and open basis."

"We have to make ourselves a friendlier neighbor. The role of government is about establishing principle, not policy," Chen said. He doesn't want the government jumping in and making regulations without first focusing on principles. "We have to be able to speak the same language [in terms of standards and cooperation], and make sure that we add on each others' innovations and talent," he continued. "Government plays a big role, but if [the U.S.] goes into a protectionist mode, the whole thing collapses."

Regarding China, Chen said that as the country becomes a more knowledge-based society, it wants to be master of its own destiny on, and not reliant on the outside. "If China has engineers that create a better mouse trap, then we should use it. But if they go off and have a special type of mouse trap or it's the only way to participate in their market, then we have huge problems ahead of us." Chen, who grew up in Hong Kong, reminded the audience that China doesn't want to repeat history--in World War II, the country was weakened because it lacked its own technology, and that technology innovation is a way to higher paying jobs and a thriving economy. He also called for ensuring China's fulfillment of its WTO commitments.

Chamber chimed in that the it's inevitable the world will be flat and jobs will go to where the best infrastructure. He lamented the lack of higher speed and pervasive broadband infrastructure in the U.S.

Tyson added, "Over the next 50 years there is no way around more multilateral cooperative government."